The
almost certain prospect of further interest rate hikes will put more
pressure on property sellers and ensure a real consolidation in the
property market during 2008, with prices likely to show flat-line growth
at best.

This is the view of Lew Geffen, chairperson of Sotheby's International
Realty in South Africa, who says that with buyers already in a much
stronger negotiating position, sellers are beginning to appreciate that
market conditions are changing.

"Sellers are now officially out of denial. With a significant
increase in stock on the market, they are coming to the realisation
that there is little point in hanging on to their properties in the
hope of achieving higher prices," he says.

Compression is likely

Geffen notes, however, that as trading conditions open up there has
been something of a spurt in the market, with, as yet, no visible differentiation
in property prices. He suggests, however, that some compression is likely
in the wake of further interest rate hikes.

"As homeowners experience more financial stress, we will see more
desperate sales and more Properties in Possession (PiPs). I would say
it's going to be a good time for auctioneers."

Geffen says that a shake-out in the local industry is inevitable 
ultimately to the benefit of the stronger companies employing top-quality
agents.

"The number of players in the local market looks set to decrease
by between 20 and 30 percent. True professionals, however, will not
only weather the storm but should be in a stronger position to negotiate
sole mandates and better commissions," he concludes.